Hedge-fund managers that do the most research will post the best returns • Hacker News Board

Re: Hedge-fund managers that do the most research will post the best returns

#161

Post by physguy1123 » Fri, Mar 23, 2018, 10:44 AM UTC

synaesthesisx wrote: post #108

I personally know and have worked with a few people who manage hedge funds (with a combined hundreds of millions in AUM). So fun fact: one of the tight-lipped secrets about the hedge fund industry (which could arguably also be said for a lot of the financial industry) - is that none of them actually know what they're doing. Characters like Ackman, Shkreli, etc all sell the idea that they know what they're doing, when…

This is certainly true of most stock-picker type hedge funds, but there are legitimate strategies that aren't a shirty replication of an index fund. Unfortunately, stock-pickers have somehow become most of the industry seem to be most of the industry (probably because there's no real talent or capital constraints on them).

Re: Hedge-fund managers that do the most research will post the best returns

#162

Post by sumedh » Fri, Mar 23, 2018, 12:11 PM UTC

ISL wrote: post #107

chollida1 wrote: post #103

Earlier quoted context omitted.

2 things about this. 1) if you are a fund you just cant' sit out 3 years. Your fund will shut down as everyone will yank their money,. if its your own money then people will leave as you won't pay bonuses. 2) If you went short in 2006 then you wouldn't have survived until teh crash of late 2008. > It's pretty easy to make way above average returns on the stock market. This is just an absurd statement along the lines…

If you are Berkshire or Amazon, you can sit on cash or potential earnings for years, and investors can trust you with it. The keys are finding the right investors and demonstrably earning their trust.

> The keys are finding the right investors and demonstrably earning their trust

Do you want to spend time finding the right investors or do you want to spend time reading 10Ks?

Re: Hedge-fund managers that do the most research will post the best returns

#163

Post by sumedh » Fri, Mar 23, 2018, 12:17 PM UTC

rockinghigh wrote: post #148

dzonga wrote: post #94

Isn't all Warren Buffet & Charlie Munger do for a good portion of the day, like 6 hours is 'READ & THINK'. Then do nothing else.

As a CEO of a conglomerate with 370k employees, I doubt Warren Buffet spends most of his time picking stocks.

That is what he say he does pretty much all day, he believes in extreme hands off approach so that he does not have to waste time with the day today operations of running a conglomerate.

Re: Hedge-fund managers that do the most research will post the best returns

#164

Post by Ntrails » Fri, Mar 23, 2018, 1:55 PM UTC

thedevil wrote: post #47

Around 2008, I read some public filings by banks. I made only two back-of-the-napkin adjustments: 1) I combined off-balance sheet assets and liabilities into the balance sheet, and 2) I changed the expected % losses to approximately that of Wells Fargo. With those two simple adjustments, I saw that some big banks were in the hole by (combined) tens of billions of dollars. The market prices for these banks made it cle…

Pension account is very hard to do properly because pricing the liabilities is, well, entirely dependent on your perspective. In the UK, at least, we might consider several different measures of what that liability number is (and what the deficit is under those measures).

Buyout => What would it cost you to pay an insurer to take the liability off your hands (discount rate will basically be the replicating portfolio of government bonds).

Accounting => Depending on standard, the discount rate might just be the expected return on your portfolio

On a 30 year duration liability that could be a difference of over 200% between the different measures. Which is realistically right though?

Re: Hedge-fund managers that do the most research will post the best returns

#165

Post by mi100hael » Fri, Mar 23, 2018, 3:51 PM UTC

MaysonL wrote: post #159

The most surprising fact for me in this article is that there are hedge funds which don't access any SEC filings in any given month.

I'd be willing to bet they just aren't using EDGAR. There are other services like Bloomberg or individual company IR sites that provide the same data.

Re: Hedge-fund managers that do the most research will post the best returns

#166

Post by MaysonL » Sat, Mar 24, 2018, 6:47 AM UTC

mi100hael wrote: post #165

MaysonL wrote: post #159

The most surprising fact for me in this article is that there are hedge funds which don't access any SEC filings in any given month.

I'd be willing to bet they just aren't using EDGAR. There are other services like Bloomberg or individual company IR sites that provide the same data.

So why do they have worse results?

Re: Hedge-fund managers that do the most research will post the best returns

#167

Post by sseveran » Mon, Mar 26, 2018, 4:09 PM UTC

MagnumOpus wrote: post #84

sseveran wrote: post #59

Earlier quoted context omitted.

Why? The reasons for having their own datacenters are either legacy or needing some sort of specialized hardware that is not available at a cloud provider. Mana which is a new pure quant fund uses AWS extensively.

The reason for having your own computers is assured secrecy of your algorithms, and complete control over redundancy, latency and network linkages. The reason for not having your own computers is because you can't afford them. A consideration for upstart funds, not a problem for RenTec.

If it is discovered that Amazon is stealing data from AWS customers than AWS will go out of business fairly quickly. Also even though Mana is new they do have ~$1B AUM.